The lesson from the pandemic? We need to tackle inequality
Jose Maria Vera
Jose Maria Vera
“Would we have been better off in New Zealand?” “Or South Korea?” I’ve been asked so many questions like these since the beginning of the COVID-19 pandemic. Nowhere feels safe enough. But some countries clearly have been in a better place to weather the pandemic than others. My colleagues in Africa point to Senegal. In Europe, Norway.
It is time to ask: just how ready were each of our governments for this crisis? And what could they be doing to avert more death, hunger and destitution? How can they rise out of this pandemic stronger?
Development Finance International and Oxfam’s recently published “Commitment to Reducing Inequality Index”, which ranks 158 countries on labour rights, taxation, and spending on health, education and social protection, provide the data we need to answer these crucial questions scientifically.
The headlines of the report make for challenging reading:
- Heading into the pandemic, only one in six countries were spending the internationally accepted basic level on healthcare – 15 percent of the total budget.
- Only 22 percent of the global workforce had adequate social protection, leaving billions unprotected.
- In more than 100 countries at least one in three workers had no labour protections, such as sick pay.
- Nearly half of all countries do not have adequate legislation on sexual assault and 10 countries, such as Singapore, have no laws on equal pay or gender discrimination.
This is despite outrage at inequality being at an all-time high. Leaders from the International Monetary Fund’s Managing Director Kristalina Georgieva to China’s President Xi Jinping and Pope Francis have all spoken out against inequality in recent years. It is increasingly hard to find a leader who does not say they care about inequality.
Yet, the data show that such concern is not translating into policies. With notable exceptions, inaction on inequality has left most countries catastrophically unprepared to weather the pandemic.
That is, millions of people have died, and hundreds of millions are falling into poverty, unnecessarily.
Consider India, which currently has the fastest growing coronavirus caseload of any country in the world. India’s leaders would do well to read the index carefully. The country is among the world’s worst performing countries in tackling inequality. Only half of India’s people have access to the most basic health services, with its health spending proportionally the world’s fourth lowest. Rather than strengthen policies during the pandemic, several states in India have used COVID-19 as a pretext to increase daily working hours and suspend minimum pay legislation.
This is not about rich countries doing well and poor countries doing poorly. The United States, a rich G7 country in which more than 200,000 people lost their lives to COVID-19, for example, trails 17 low-income countries like Liberia on labour laws in the index due to anti-union policies and a low minimum wage. The toll the pandemic is taking on the US is impacted by intersecting inequalities. In the US, COVID-19 landed on a healthcare system that excludes millions of people living in poverty, especially Black and Latinx communities. Only one in 10 Black households has health insurance, compared with seven in 10 white households.
Unlike India and the US, and many other countries, however, some countries clearly have been better positioned to weather today’s pandemic.
Consider Thailand, where the official COVID-19 death toll remains below 60. The country provides universal healthcare. It also does so by spending only $277 per capita on health. The US, in comparison, spends $11,000 per capita on its famously privatised system.
Or consider South Korea, which responded to the pandemic by instituting universal emergency relief payments for 22 million households. The country in recent years has boosted the minimum wage, increased taxes on the richest while boosting spending on health and education. That is inequality-busting leadership. Spain, where I live, has shown how progressive policies are possible in introducing a permanent basic income for over two million people.
Moreover, some countries are recasting their entire strategies to tackle inequality. New Zealand, another success story of the pandemic, has centred its entire budget on “wellbeing” to tackle issues like child poverty, challenging the old and stubborn obsession with the gross domestic product (GDP) and little else. Vietnam, meanwhile, is considering making reducing inequality core to its upcoming 10-year plan – which would be a welcome step.
And so, the lessons are clear.
First – that governments need to get a handle on inequality. It is not inevitable, like rain from the heavens. It comes down to government choices – as the pandemic profoundly exposes. The ability to go to the hospital, or have a safety net when losing your job, has shaped our experience of this pandemic. That governments have done too little to tackle inequality has made us less safe.
Second – that governments rich and poor have huge scope to act. If Sierra Leone – a poor nation – can make bold reforms to make secondary education free and clamp down on tax evasion by mining companies, or if Costa Rica has been able to achieve near-universal primary healthcare in 10 years, so can others. It is clearer than ever that political will, not sound economics, is the barrier to change.
And third, that governments can better reduce inequality within their borders if they cooperate across them. Governments would be wise to act together on areas of common interest – expanding protection to workers, providing debt cancellation to poor countries and pursuing solidarity taxes on wealth and income. International cooperation is vital to avert the kind of austerity we saw after the global financial crisis, and we are likely to see promoted after the pandemic.
The perils of the pre-COVID-19 era, in which taxes and labour rights were lowered and public goods were privatised in the pursuit of limitless growth, has been readily exposed. The enduring legacy of the pandemic must be a new race to the top, in which governments cooperate in their shared commitment to reducing inequality.